Corruption, cronyism could sink leaky boat

By Rod Oram

Between the lines


"Six months in a leaky boat" was the music by which President Clinton left the stage of Auckland's Maritime Museum yesterday after delivering a clear message about where he thinks Apec should sail from here.

Whoever chose Split Enz's song has a sense of humour and history.

Close to foundering in the Asia Crisis - particularly after the partly US-induced debacle of last year's Kuala Lumpur summit - Apec has been saved by frantic bailing and re-rigging.

Seaworthy again, it's time to plot a new course. But to where?

Apec's original tack was a commitment to achieving free flows of trade and investment. Some Apec members still threaten to mutiny but that thrust could come to fruition over the next couple of decades if Apec keeps working very hard at it.

But the Asia Crisis showed free trade alone could not achieve prosperity and stability. If people, companies, institutions, governments and economies were ill-equipped they would collapse during busts, languish during booms.

So post-Crisis, Apec's second tack was to start strengthening skills of people and organisations so they could make the most of markets. It was a highly significant shift, taking Apec initiatives behind borders into members' domestic issues. Some subjects such as competition policy are highly contentious yet even defensive countries are warming to the work.

But even that was not enough, Apec's leaders and bureaucrats now realise. Apec suffers from two weaknesses which are even more fundamental: first, people across the region are ambivalent, or worse, hostile to Apec. They are deeply sceptical about its benefits; second, Apec avoids values. It has no moral compass to steer by.

Together these failures could undo Apec. Thus, leaders in politics and business have started to look for the third tack in Apec's course. Typical of the new ideas and language were two political speeches to the chief executives' summit this weekend:

"I think they (investors and entrepreneurs) will be drawn to countries where there's fairness and openness and freedom, good education system and broad participation in the prosperity of the nation." - President Clinton.

"The Apec economies should pay greater attention to the growing economic and social disparities, both within and across nations." - President Kim Dae-jung of South Korea.

The sentiments were echoed in discussions by chief executives and reinforced by their commitment to work on a model code of conduct to express the responsibilities some have already shouldered.

But others haven't. Around the region, in developed and developing countries, corruption, cronyism and other norms undermine societies.

If Apec is to achieve free and fair trade based on open and strong societies it needs to bring people together around some basic values, yet let them express those values in their own way.

If not, the split could end Apec.